AARP New Hampshire

A little known drug industry tactic to keep generic prescriptions from consumers has come under scrutiny by the US Supreme Court – and a ruling from the highest court in the land is good news for Granite Staters and applauded by AARP.

The industry approach is called pay-for-delay and occurs when a brand name pharmaceutical company pays a generic competitor to keep its competing product off the market for a certain period of time. The goal is to drive consumers to the more expensive brand name drug for as long as possible. It’s that tactic that the US Supreme Court ruled may be a violation of antitrust laws.

“In New Hampshire, nearly 18 million prescriptions were filled in 2011,” said AARP New Hampshire State Director Kelly Clark. “Pay-for-delay agreements for Lipitor and other drugs hit Granite Staters right in their pocketbooks.”

According to the AARP Public Policy Institute’s new Rx Price Watch report, Pfizer reportedly employed a variety of tactics – including pay-for-delay – in an effort to retain revenue and market share for the popular anti-cholesterol drug Lipitor, already on the market for 14 years with a patent protected monopoly. The report breaks down the unusually aggressive strategy reportedly undertaken by Lipitor’s manufacturer before and after the drug’s patent expired and discusses how the effort could become a model for other brand-name drug manufacturers facing generic competition.

AARP has long advocated for ending these harmful agreements that excessively extend patent monopolies and result in patients foregoing needed treatment because of the high cost of brand-name drugs. These agreements artificially inflate health care costs across the board as well; the Federal Trade Commission estimates they cost consumers and taxpayers $3.5 billion per year.

“These agreements also increase costs for publicly-funded programs like Medicare and Medicaid,” added Clark. “Ending them is just one responsible way to reduce Medicare costs without cutting benefits or forcing seniors and future retirees to pay more.”